On May
1, 1994,
Ayrton Senna died in a horrific crash during the San Marino Gran Prix -- a
racing incident with nobody to blame. In
that year, Formula One racing consisted of fourteen teams, and none of the team
owners or managers wished harm upon their drivers. But competition, mixed with technology, can
be a deadly combination. Speed drove the
teams' development efforts, and safety was a secondary consideration. They couldn't
help themselves. Teams knew that
diverting resources to safety would render them uncompetitive; they were
trapped in a deadly quest for speed. To
save the lives of their drivers, they needed outside help.

That help
came in the form of increased regulation by FiA, the governing body of Formula
One racing. F1 Supremo Bernie Ecclestone sought advice from teams, drivers,
engineers, and Dr. Sid Watkins. Within a
season, new rules governing fuel containment, driver protection,
crashworthiness, track design, and medical evacuation plans were
implemented. Today, the quest for speed
goes on within a finite structure of safety regulation. Although spectacular crashes still occur at a
pulse-quickening rate, the last fatality of F1 remains to this day that of
Ayrton Senna in 1994. Who is better off
for this regulation? Drivers, of course, as well as the teams and
the sport as a whole.

Today's
corporate environment is no less competitive than F1 racing. Technology has sharpened competition by
arming it with rapid product cycles, access to global financial markets,
unprecedented demographic marketing information, and decision modeling
capabilities that demand quick and decisive implementation of strategies -- no
matter what the cost to society, markets, or the environment. Each corporate contender must use all of the
competitive resources available to it, or risk losing out to those which do and
paying the ultimate price of business failure.
Corporations, like F1 teams, can't
help themselves -- they are trapped in a deadly quest for survival and
profits. And to save society, the
environment, and themselves, they need outside help.

Adam
Smith imagined an invisible hand of market demand that could temper the
voracious appetites of suppliers; perhaps he did not appreciate the degree to
which supplier power could be concentrated.
Karl Marx predicted that private capital -- corporate wealth today --
would become so dominant that it would burn itself out in a revolutionary
conflagration; perhaps he did not appreciate the regulatory potential of a
powerful democracy.

Concentrated
capital is its own worst enemy, and that of its host society. In order to fortify Smith's invisible hand,
and to avoid Marx's revolution, permanent and consistent regulation is
required. Markets that are free from
monopoly, oligarchy, and extreme concentration are good for society, the
environment, and even business enterprise.
Free markets require rules that prevent unsafe competitive practices
such as deceptive advertising, marketing hazardous products, pumping emissions
into the air and water, exploitative labor practices, predatory pricing
policies, colluding with competitors, forming trusts to restrain trade -- and
perhaps the most damaging practice of all:
tainting the legislative, regulatory, and enforcement processes with the
coercion of unmatched volumes of money and power.

Individual corporations and industries fear
the regulatory potential of a powerful democracy. Compliance can be expensive, and always
restricts the strategic options available.
So regulation will always be vigorously resisted -- corporations just can't help themselves. Like each F1 team, each corporation and
industry must compete with every weapon at its disposal, and will consider any
restriction to be a threat to its very survival. Consequently, industry has a history of
rigging the structure of public policy to its advantage. This is reflected in a tax code that
subsidizes capital, cutbacks in any government spending that threatens to raise
corporate taxes, banking regulation rollbacks, and today's attempts to defund
regulatory agencies like the EPA and FTC.
And yet, the regulatory potential of a powerful democracy may be the
only thing that stands between corporations and their own destruction.

If we are to save American industry from itself,
we must first reclaim our democracy for the people. Start with a constitutional amendment, if
necessary, to rectify the damage done by Citizens
United and McCutcheon. Then reform federal elections with
carefully-allocated public funding.
Then, and only then, we can pursue real reform to create a level
competitive playing field within the economy.
This will require fundamental tax reform and careful regulation of
business and industry. And don't count
on getting any help from corporations, because they are too immersed in looking
after their own short-term interests; they
just can't help themselves.

Years ago I made a decision to commit to a life of business management. Kids do the dumbest things! After thirty five years as a small business consultant, CFO, and university educator specializing in quantitative business and economic (more...)